When Vice President Joe Biden proclaimed during his recent visit to Baghdad that he was "absolutely confident" that Iraq's politicians would be able to set up a "truly legitimate and representative government" as they supposedly continue "to stand up and build" their democracy, he touched upon the important subject of predicting Iraq's future.

This matter is vital in considering whether the invasion of Iraq, at a cost of over $1 trillion, has truly been in American interests, and particularly relevant in light of the fact that US forces have now begun the process of ending combat operations in Iraq by the end of August. Unfortunately, however, there are many reasons why Biden's sense of optimism is naïve at best.

To begin with, the country is still locked in political stalemate: no single faction can form a government. Nouri Al-Maliki's State of Law Coalition and the Iraqi National Alliance (INA), a coalition of Shi'a parties, cannot form a majority in parliament, and require the additional support of the Kurdish parties. The problem is that Maliki insists on retaining power, and the INA will not tolerate that.

Maliki's only other option is to seek a coalition with Iyad Allawi's Iraqiya bloc, but even if such a deal could be struck, it would be hindered by the fact that the Kurdish parties would likely refuse to join such a coalition to form a government because Iraqiya ran on an anti-Kurdish autonomy platform in the northern areas. At present, conflicting reports exist as to whether Maliki is finally willing to concede the premiership to Allawi, but even Allawi himself has claimed that the best that can be hoped for is the completion of a new government by the end of August.

Although it is likely that there will be an eventual Shi'a-Kurdish coalition, the lack of political progress may reignite the sectarian violence that was so pervasive back in 2006, and could thus render null the $20 billion or so of US taxpayers' money spent on training Iraqi security forces. Indeed, it is probable that Sunni Arabs, historically the ruling minority, will still be marginalized, and thereby frustrated about having little political influence.

Another huge problem is the poor progress in reconstruction efforts, despite the billions put in by the US and other countries. A case in point is Iraq's current 5-year development plan to construct two million housing units by 2014 to end the present housing crisis in the country. The project has already led to number of business deals, yet, in reality, little has been done. In May, Karbala, as part of the development plan, aimed to build 250 housing units within 4 months, but by the end of June, nothing had happened as the bureaucracy impeded obtaining the necessary licenses to begin construction. It is not at all surprising that in 2009, the World Bank ranked Iraq 153rd out of 183 countries for ease of doing business. On average, 14 permits are required to build anything in the country -- making it extremely difficult for construction firms to operate.

As Daniel Pipes notes, Iraq is still emerging "from the Stalinist nightmare of Saddam Hussein." One of the legacies of this nightmare is Iraq's predominantly state-run economy that still exists in spite of the attempted efforts at privatization implemented by the Coalition Provisional Authority, which only flooded the country with cheap imports and added to the problem of mass unemployment in the immediate aftermath of the invasion.

Even with oil and natural gas production, it is unreasonable to expect that the "free…stable, democratic, and prosperous Iraq" envisioned by Bush will come about through increasing oil and gas revenues. Although the huge signing bonuses, large taxes and small fees per barrel mean that most of the profit from oil and gas revenues goes to the Iraqi government, it is unlikely that such income will benefit average Iraqis.

There are two main reasons for this: first, Iraq is a country replete with corruption. Iraq currently ranks 176th out of 180 countries on Transparency International's Corruption Perceptions Index (CPI), so the additional revenues will merely concentrate more wealth in the hands of an elite that is largely unresponsive to the needs of the people, as the recent mass demonstrations against the continuing lack of electricity show.

Second, because the expansion of the oil and gas industry is not labor-intensive, it cannot solve the problem of high unemployment. Countries that depend heavily on oil production usually compensate for high unemployment by creating unnecessary government jobs. This cannot be done even further in Iraq, where the government is already the largest single employer.

It is most probable, therefore, that Iraq will not emerge as stable or prosperous anytime soon; and the nation's fledgling democracy risks being undermined by sectarian tensions.

It follows unfortunately that the Iraq War might turn out to be a monumental waste of American blood and effort. In addition, the future does not bode well for US-Iraq relations: it is likely that any government that does emerge will be more closely tied to Tehran than Washington.

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